Title 38, Insurance

(A) Documents, materials, or other information, including the ORSA Summary Report, in the possession or control of the department that are obtained by, created by, or disclosed to the director or another person under this article, are recognized by this State as being proprietary…

An insurer who, without just cause, fails to timely file the ORSA Summary Report shall, after notice and hearing, pay a penalty of one thousand dollars for each day's delay, to be recovered by the director. The penalty funds recovered must be paid into the General Revenue Fund of…

No insurer may publish a statement of its assets and liabilities unless it shows both its assets and liabilities with equal conspicuousness. The statement shall reflect the assets and liabilities as were shown on the last annual statement or subsequent report of examination accep…

The requirements of this article become effective on January 1, 2018. The first filing of an ORSA Summary Report must take place in 2018 pursuant to Section 38-13-850.

This chapter provides for the creation of Special Purpose Reinsurance Vehicles (SPRVs) exclusively to facilitate the securitization of one or more ceding insurers' risk as a means of accessing alternative sources of capital and achieving the benefits of securitization. Investors …

The SPRV may not declare or pay dividends in any form to its owners unless the dividends do not decrease the capital of the SPRV below five thousand dollars and, after giving effect to the dividends, the assets of the SPRV, including assets held in trust pursuant to the terms of …

(A) The records of the SPRV must be maintained in this State and must be available for examination by the director, or his designee, at any time. No later than five months after the fiscal year end of the SPRV, the SPRV must file with the director, or his designee, an audit by a …

The directors of a SPRV must elect officers that they consider necessary to carry out the purposes of the SPRV pursuant to this chapter. The provisions of Title 33 relating to the indemnification of officers and directors apply to and govern SPRVs organized under this chapter. (A…

The director, or his designee, may charge fees to reimburse the director, or his designee, for expenses and costs incurred by the Department of Insurance incident to the examination of financial statements, review of the plan of operation, and to reimburse other such activities o…

A SPRV operating under this chapter may be dissolved at any time by a vote of its board of directors, and after the action has been approved by the director, or his designee. A voluntary dissolution must not be effected or allowed until and unless all of the obligations of the SP…

(A) The provisions of Chapter 27 of this title apply to a SPRV, except to the extent modified below. (B)(1) Notwithstanding the provisions of Chapter 27, the director, or his designee, may apply by petition to the circuit court for an order authorizing the director, or his design…

(A) The SPRV or the activities, assets, and obligations relating to the SPRV are not subject to the provisions of Chapters 29 and 31, and a SPRV must not be assessed by or otherwise be required to contribute to any guaranty fund or guaranty association in this State with respect …

(A) Assets of the SPRV held in trust to secure obligations under the SPRV contract must at all times be held in: (1) cash and cash equivalents; (2) securities listed by the Securities Valuation Office of the NAIC and qualifying as admitted assets under statutory accounting conven…

A SPRV contract meeting the requirements under this chapter must be granted credit for reinsurance treatment or must otherwise qualify as an asset or a reduction from liability for reinsurance ceded by a domestic insurer to an assuming insurer under Section 38-9-210 for the benef…

The securities issued by the SPRV pursuant to a SPRV insurance securitization must not be deemed to be insurance or reinsurance contracts. An investor in such securities issued pursuant to a SPRV insurance securitization or any holder of such securities must not, by sole means of…

(A) The following sections of Title 38, Code of Laws of South Carolina, 1976, apply to SPRVs: 38-2-10, 38-3-110 through 38-3-240, 38-5-120, 38-5-130, 38-13-10 through 38-13-420, and 38-57-200. (B) No other provisions of this title are applicable to a SPRV organized under this cha…

The director, or his designee, may promulgate regulations necessary to effectuate the purposes of this chapter. Regulations promulgated pursuant to this section do not affect a SPRV insurance securitization in effect at the time of the promulgation.

For purposes of this chapter, the following terms have the indicated meanings: (1) "Aggregate limit" means the maximum sum payable to the ceding insurer under a SPRV contract. (2) "Ceding insurer" means one or more insurers or reinsurers under common control that enters into a SP…

(A) Within thirty days after receipt by the director, or his designee, of a complete filing by the prospective SPRV organizer for authority to form or acquire a SPRV, which SPRV must exist and operate expressly for the limited purposes set forth in this chapter, the application m…

SPRVs authorized under this chapter are created for the limited purpose of entering into insurance securitization transactions with investors and into related agreements to pay one or more ceding insurers agreed upon amounts under a SPRV contract upon the occurrence of triggering…

(A) SPRVs authorized under this chapter may at any given time enter into and effectuate SPRV contracts with one or more ceding insurers, provided that the SPRV contracts obligate the SPRV to indemnify the ceding insurer for losses and that contingent obligations of the SPRV under…

(A) A SPRV authorized under this chapter must have the necessary powers to enter into contracts and to conduct other commercial activities necessary to fulfill the purposes of this chapter. Those activities may include, but are not limited to, entering into SPRV contracts, issuin…

Notwithstanding the provisions of Chapter 21 of this title, the SPRV, the SPRV organizer, or subsequent debt or equity investors in SPRV securities must not be deemed affiliates of the ceding insurer by virtue of the SPRV contract between the ceding insurer and the SPRV, the secu…

A SPRV must have minimum initial capital of not less than five thousand dollars. All of the initial capital must be received by the SPRV in cash. The minimum initial capital required and all other funds of the SPRV in excess of its minimum initial capital, including funds held in…

No surety insurer authorized to transact business in this State may execute a fidelity or surety bond for an officer or employee of this State or of a county, municipality, or other subdivision of this State or for an officer or employee of a bank, trust company, or other fiducia…

If a fidelity insurer or other corporation or company doing a fidelity insurance business in this State becomes surety on bonds or obligations mentioned in this chapter, it is subject to being sued on these bonds or obligations in the county of the residence of the principal of t…

The director or his designee and the Attorney General shall remove from the list of surety insurers whose bonds are acceptable under Section 38-15-10 the names of insurers who in their judgment fail or refuse to carry out promptly their obligations in good faith.

Insurers doing business in this State who offer or undertake to become surety upon any bond or other surety contract must in addition to any other deposit required by the laws of this State deposit with the director bonds of the United States or of any state of the United States …

When the bonds required to be deposited by an insurer in Section 38-15-30 are reduced below the value of one hundred thousand dollars, except by unexpected fluctuation in value, the right of that insurer to do business in this State may be revoked or suspended.

In lieu of depositing bonds with a market value of one hundred thousand dollars, an insurer may satisfy Section 38-15-30 by depositing one hundred thousand dollars in cash in the name of the director with the trust department of a national or state bank of this State approved by …

A surety insurer having an unrevoked certificate of authority may, upon production of the certificate, be accepted as surety on the bond of any person required by the laws of this State to give bond and may be the only surety necessary to render this bond valid. However, other su…

An insurer which executes any bond or undertaking of surety under this chapter is estopped, in any proceeding to enforce the liability which it has assumed to incur, from denying its corporate power to execute the bond or assume the liability.

A person is considered as acting agent for a surety insurer established in another state when he represents the insurer by: (a) receiving or transmitting applications for suretyship, (b) receiving for delivery bonds founded on applications forwarded from this State, or (c) procur…

No insurer is relieved of its liability upon any bond of a city, county, or state officer because the books and accounts of the principal have been examined and approved as correct by the proper authorities when in fact there has been a breach of the bond of the officer and a los…

Individuals, partnerships, and corporations of this State, designated as "subscribers", may exchange reciprocal or interinsurance contracts with each other or with individuals, partnerships, and corporations of other states and countries, providing indemnity among themselves from…

There must at all times be maintained as a reserve assets in cash or securities equal to fifty percent of the net annual advance premiums or deposits collected and credited to the accounts of subscribers on policies having one year or less to run and prorata on those for longer p…

"Net annual advance premiums or deposits", as used in this chapter, means the advance premiums or deposits made by subscribers after deducting the amounts specifically provided in the subscribers' agreements for expenses.

When funds other than those which have accrued from premiums or deposits of subscribers are supplied to make up a deficiency as provided in Section 38-17-100, they must be deposited and held for the benefit of subscribers under any terms and conditions the director or his designe…

A reciprocal exchange transacting business in this State may sue or be sued in the name in which its contracts are authorized to be exchanged.

The business affairs and assets of reciprocal or interinsurance exchanges, as shown at the office of its attorney, are subject to examination by the director or his designee as often as he sees fit. The cost of the examination must be paid by the exchange examined.

Each attorney shall annually make and file by March first with the department a sworn statement, upon a form to be prescribed and furnished by the director or his designee, showing that the financial condition of affairs at the office where the reciprocal or interinsurance contra…

Each attorney shall pay a license fee of four hundred dollars every two years for the issuance of the certificate of authority or its renewal. In addition to the license fee, each attorney shall pay all of the taxes provided by law on companies doing a like business in this State…

Any attorney who exchanges any contract for indemnity specified in this chapter or directly or indirectly solicits or negotiates any applications for this contract without first complying with this chapter is guilty of a misdemeanor. The director or his designee, in his discretio…

The subscribers shall, through their attorney, file with the department a declaration verified by the oath of the attorney setting forth: (1) The name of the office at which the subscribers propose to exchange the indemnity contracts. This name may not be so similar to any name p…

The maximum liability of any subscriber for losses and expenses must be fixed and determined by the power of attorney.

The director or his designee shall require every reciprocal exchange to provide security deposits pursuant to Sections 38-9-80 to 38-9-140 as required for other insurers doing business in this State.